On the heels of the Central Bank’s ban on cryptocurrency activities in the country, Nigeria’s stock exchange authorities have suspended their proposed crypto regulations and stated their position on crypto activities in Nigeria.
Inside information reveals that the SEC and Central Bank of Nigeria (CBN) will work hand-in-hand to develop a reliable infrastructure to regulate the country’s crypto exchanges.
SEC’s position on CBN’s cryptocurrency transaction ban is clear
The Registrar of the Commission, Timi Agama, said that Nigerian regulatory authorities couldn’t turn a blind eye on the crypto market, adding that it is a $2 trillion market.
Agama’s remarks were part of his reactions on Sunday during a virtual conference held in Abuja and organized by the Nigerian branch of the Association of Capital Market Academics (ACMAN):
“One of SEC’s interests now and in the future is to form rules and regulations that will cater to these global challenges associated with crypto. Even all parts of the world are still struggling to understand cryptocurency and other digital assets. Hence, it is necessary for the capital market, especially at SEC to seek more knowledge about it. We can’t be static while the whole world is making profound progress into the crypto ecosystem.”
Agama postulates that the sec must view crypto as a path to attract substantial foreign direct investment into the country, which is essential for gross domestic growth. For example, the National Bureau of Statistics states that only ten states of the country receive any FDI throughout the last year – that’s not supposed to be the case.
The Director, CBN Financial Policy and Regulation, Kevin Amugo, opined that the Central Bank needed enough time to understand crypto deals’ anonymous nature. That was the reason for the ban.
What Kevin failed to understand is that the majority of these crypto deals are not entirely anonymous. Chainalysis, Ciphertrace and other blockchain intelligence have reliable resources for making detailed crypto inquiries.
Furthermore, most Nigerian crypto exchanges were deploying best practices to have detailed information about their customers, such as using various authentication systems and the bank verification number.
Later on in the conference, Amugo disclosed that the CBN and SEC are in collaboration with all federal parastatals to create a framework that will regulate all crypto transactions all over the country. He also said they would consult international bodies on a well-structured system that the authorities can quickly implement and which will be beneficial to all concerned.
The CBN should have tried a different approach
Crypto enthusiasts at the event suggested that the authorities should adopt a different approach to understanding the crypto world instead of banning it outrightly.
In his response, Amugo said that the apex bank’s granting of licenses to finTech companies is enough proof that the CBN doesn’t intend to stifle the fintech industry.
Despite the ban from the CBN, the bitcoin ecosystem in Nigeria tops that of the other world. It would be recalled that Southeast Asia collaborates with Nigeria to make cryptocurrency adopted globally. This collaboration was established last year.